OTT Advertising

“ OTT is TV on steroids—for viewers and brands ”

In today’s households, television is more than entertainment—it’s a cornerstone of connection and relaxation. Families come together over beloved movies, dive into plot twists from gripping crime series, and binge-trending shows with loved ones near and far, fostering connections even across the miles. TV has evolved into an interactive, personalized experience that seamlessly fits into our lives.

Television viewers are finally in control of what they watch when they watch, and for however long they want. TV has become interactive, shaping itself into our lives rather than the other way around.

All of that is due to OTT media—a technology you’re already familiar with that has completely reshaped our television experience. An easy way to understand OTT is that it is ‘TV on steroids.’ It’s made everything we love about great television stronger, measurable, and within reach. It’s also doing the same for brands with OTT advertising.

Get comfy: television advertising is changing, and we’re going to share all the details you need to know about this evolving technology.

What is OTT?

OTT stands for “over-the-top” and simply refers to media that viewers access directly over the internet. OTT media services, much like Netflix, Hulu, Amazon Prime Video, and Disney+, provide streaming of video content like your favorite movies and shows via the internet instead of traditional ways of viewing entertainment like cable.

While millennials, especially higher-income millennials, are the main consumers of OTT programs, people of all ages, ethnicities, and income levels are streaming content every day. In fact, the fastest-growing segment of OTT viewers is 55+!

• 85% of U.S. consumers subscribe to at least one paid streaming video service
• 78% of U.S. baby boomers have a paid streaming video subscription 
• 57% of U.S. consumers use at least one ad-supported streaming video service 
• 27% of U.S. households are cord cutters (cut cord in past 5 years)
• 60% of U.S. households are cord nevers (no cable or satellite in past 5 years)
• 72 million homes are estimated to be using OTT platforms exclusively by 2025

What’s the difference between OTT and CTV?

Many people often mix up OTT and another term, CTV, or use them interchangeably. The difference is simple: OTT refers to the larger umbrella of all online streaming services. CTV stands for “connected TVs” and is a subset—or portion—of OTT options. Connected TVs are already built to connect to the internet or use an internet-connected device to do so directly (like Roku or Amazon Fire). So, instead of streaming the latest episode on your laptop (OTT), you watch it directly from your television set (CTV). It feels much more like traditional TV, but the way it delivers new content is the same. 

While we’re here, let’s get some other acronyms out of the way about how people get access to streaming content. 

How Does OTT Work?

People can access or stream content through any internet-connected device. These can include any of the following:

Beyond this primary streaming device, almost everyone uses a second device while they’re watching television. In 2019, that percentage was 88% (and we’re pretty sure the other 12% are fibbing). Data from Nielsen found that up to 71% of viewers are researching on those devices—looking up information about the show or ads they’re watching.

What is OTT advertising?

OTT advertising is advertising delivered to viewers through any streaming video services on their laptop, smartphone, or connected TV. Ads can be shown before, during, or after a video. Typically, ads are videos themselves. For ads delivered on computers or mobile devices, they can also be interactive assets. Since most users are watching with their phone in hand, there’s an incredible opportunity for them to research any ads on their phones while the video continues playing. 

As mentioned, OTT is TV on steroids, and nowhere is this truer than in the OTT advertising space.

Since these ads are limited in time and amount, users are much more receptive to their messaging. It’s a much more affordable option versus television buys nowadays, with all the benefits of digital display ads. Your brand will enjoy hyper-targeting and in-depth attribution tracking to effectively and efficiently show conversions from the OTT buys. You’ll benefit from awareness and instant research abilities by consumers who are binge-watching with phone in hand. 

Support for ad-supported platforms is rising among viewers as well. During the initial wave of shelter-in-place restrictions with COVID-19, ad-supported (or AVOD) services grew 9% from April 2020 to January 2021, compared to 5% in non-ad-supported formats. 

Further, a survey from Deloitte during this period found that “more consumers want cheaper, ad-supported streaming video options.”

• 43% prefer ad-only model. No subscription fee. ~12 minutes of ads per hour
• 22% prefer some ads. $6/month subscription fee. ~6 minutes of ads per hour. 
• 35% prefer no ads with $12/month subscription fee.

Who are the biggest OTT services?

OTT media services, or providers, are companies that stream content. Many have various subscription or ad pricing options. While their popularity always fluctuates over time, the big ones in 2020 are:

How much of the market do each of these control? We love a good graph, so we pulled together some data from mid-2020 rates. 

Pay attention to other OTT services

If you’re thinking about OTT advertising, there’s a largely untouched market beyond the big names in that “All Other Apps” category. It’s at least a full fifth of the hours watched and also the fastest-expanding portion as the OTT space adds in new players and becomes more competitive. Trends in this space are changing quickly too.

These other apps and services are big names themselves who are finally and fully entering the OTT space. There are now over 300 services to choose from. For brands, this represents a huge opportunity as many allow ads to play before, during, or after a video. 

How to advertise on OTT platforms 

If you are considering entering the world of OTT advertising, do it with data-driven insights and results. With the latest technology, you can now answer the prickly unknown questions that used to be an issue with OTT. Put simply, you can figure out what types of people saw your ad and what they did after. That gives you the ability to target a relevant audience and demographic segments and program the right ads to meet your company’s goals. 

Make sure you are tracking a variety of success metrics such as: 

• Video completion rate
• Performance by device 
• Behavioral insights 
• Placement performance 
• Attribution tracking 

An entry-level budget we recommend for results in this category is very reasonable for businesses at only ~$3,000/month, especially when you can track success rates, optimize the strategy based on data, and drive greater ROI as you move forward.

For national and local businesses, we have seen huge success in not only awareness campaigns but also lead-focused conversion campaigns. These campaigns have great ROIs as we can track both the forms and thank you page actions on client websites. 

Further, as tracking and creative features become more advanced and targeting audience options grow, we are incredibly excited about the future of this advertising tactic. Some recent tracking options include:  

• Post-view website visit attribution: Measures direct engagement on your website after OTT/CTV ad exposure
• Inferred brand impact: Understands overall impact of an OTT ad by evaluating your target market’s online behavior after ad exposure
• Foot-traffic attribution: Details offline, cross-device ID physical tracking into retail stores after viewer sees an ad
• Offline conversion tracking: Pinpoints audience ad exposure to subsequent online, but untraceable, activity or offline purchases
• Online purchase attribution: Tracks users who make a purchase after OTT ad, whether on your website or another online retailer, like Amazon

Things change; know what works

OTT advertising puts your brand in their living room and the data in your hands. Let’s forget all that nonsense about the “new normal” or the “decline of TV.” OTT streaming services have been in homes for years now. They influence our language (Netflix and chill, anyone?), provide personalized video content for families to gather at the end of a long day, and new opportunities for brands to connect with customers. 

Things change but we know what works. OTT advertising is a vital part of today’s advertising landscape and one you’d be smart not to overlook. Have more questions? We’re always here to talk data. 

Give us a call today to learn more.